Car allowance paid by employer

doorknob

Please can someone help me? My husband currently receives a car allowance from his employer which he is taxed on. He leases a car with this money for work purposes only. He already completes a self assessment to claim business miles. Instead would he be able to claim the lease payments for the car and any fuel/car expenses?

foxy-stoat

No he cannot - not sure why he would be entitled to in this situation.

doorknob

Thanks for your reply. The reason I ask is he is heavily taxed on the car allowance money and thought that lease payments on a car would be tax deductible on his self assessment.

foxy-stoat

They may be if he was self employed.

I tend not to think about the car allowance, its just added to my salary and then financed a car based on what is affordable - leasing a brand new car wasn't going to be cost effective for me so just personal loan and older car that gets replaced when the time comes.

BoGoF

I am assuming he claims business mileage at 45/25 ppm? That is all he is entitled to claim.

k3lvc

BoGoF wrote: »

I am assuming he claims business mileage at 45/25 ppm? That is all he is entitled to claim.

Plus tax relief on the difference if he's not

arcon5

It's my understanding you can do one or the other... But you cannot switch mid tax year.

BoGoF

arcon5 wrote: »

It's my understanding you can do one or the other... But you cannot switch mid tax year.

What do you mean one or the other?

foxy-stoat

arcon5 wrote: »

It's my understanding you can do one or the other... But you cannot switch mid tax year.

If you get a car allowance from your employer then you will receive upto 45p a mile - if you only get 25p then you claim 20p at the end of the tax year.

Or

Your self employed and can claim lease payments + mileage

k3lvc

foxy-stoat wrote: »

If you get a car allowance from your employer then you will receive upto 45p a mile - if you only get 25p then you claim tax relief on 20p at the end of the tax year.

Or

Your self employed and can claim lease payments + mileage

Corrected for you - you can't claim the full 20p

facade

But if the car is used exclusively for work purposes, then there ought to be a better way to finance it, as he really shouldn't have to pay tax on a "benefit in kind", as he hasn't got one.